Sales of Big-Ticket Items Are Rising

Consumers and businesses went on a big-ticket spending spree in July, dollar-sign-769720-756981sending home, car and equipment sales soaring by the largest amount in years.

The sales, detailed in two recent government reports confirmed a subtle but  shift in confidence about the economy. New home sales jumped almost 10 percent from June, while orders for long-lasting goods like appliances, planes and computers rose nearly 5 percent in July, the third increase in the past four months.

It remains unclear whether the growth can be sustained. Though the increases in housing sales and manufacturing last month were dramatic, they came from extraordinarily low levels and were fueled by temporary government programs like Cash for Clunkers and tax credits for home sales.

Most economists now agree the recession that began in December 2007 has ended or is ending. Some say the economy is poised to grow strongly in the July-September quarter, but will probably show weaker growth after government stimulus spending tapers off.

Sales of new homes surged to a seasonally adjusted pace of 433,000 in July from 395,000 in June, the Commerce Department said, providing another sign the housing market is bouncing back from the historic bottom reached early this year. Driven by falling prices, the fourth-straight monthly increase was greater than expected.

While sales are still off nearly 70 percent from the incredible peak four years ago, they are still up more than 30 percent from the bottom in January — a big relief after a long decline.

The improved outlook could help further boost the economy. As home sales rise, builders will gradually need to hire more workers to pour foundations and pave roads, reversing the trend that saw 1.4 million industry jobs shed since the recession began.

Much like Cash for Clunkers, homebuyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000, for first-time owners. Home sales must be completed by the end of November for buyers to qualify.

For condo improvement tips go to How to Make the Space in Your Condo Feel Larger or  Inexpensive Ways to Increase Your Condo’s Value.

Allow me to help you find the home of your dreams Contact Eddie Perez at (201) 344-2886, www.investhoboken.com.

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